IBM Study: CMOs Seeking Return on Marketing Investment

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David White
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Measuring marketing ROI
David White   11/29/2011 11:41:09 AM
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I agree measuring the value of each touchpoint is perhaps ideal, but most people are a long way from that according to our (Aberdeen's) research.  60% of companies taking part in our survey from September 2011 use "marketing generated leads converted into the sales pipeline as active opportunties" as their primary measure of marketing ROI.  On that basis, we found that top performing marketing organizations are responsible, on average, for generating 60% of the company's pipeline.

When it comes to mid-market companies in particular, marketing is only responsible for 16% of the sales pipeline.  This shortcoming is due in part to a lack of analytics as I blogged here.

 

Mitch Wagner
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Measuring impact of each touchpoint is good, but measuring them together is also good. The combination likely has a different effect than the individual touchpoints added together. 

Ryck
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Re: MARKETING ROI - THE HOLY GRAIL
Ryck   10/14/2011 5:48:37 AM
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Mitch, in the example I cited, the CMO only focused on those marketing activities that he controlled--no one is trying to make him accountable for things beyond his control.  For example, one year he might learn that the combination of a certain promotion, a webinar series and an ad run in a traditional publication generated the greatest conversion of prospects to customers and the greatest revenue.  The point being, many people are looking for the ROI of each of those activities individually.  The reality is that several marketing initiated activities together finally yielded a positive result.  Perhaps one day we will be able to measure the impact of each one, but that doesn't seem possible, as marketers are not working in a vacuum or a research lab where they have total control of all the variables in the environment. 

Mitch Wagner
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Ryck - There are multiple touchpoints for every customer, and every one of them influences demand. And yet the CMO only has power over some of them. 

Ryck
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MARKETING ROI - THE HOLY GRAIL
Ryck   10/13/2011 5:41:19 PM
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I think many would like to get to a point where they launch a marketing activity and then they see a financial result--good or bad.  The problem is that the end result--revenue--is influenced by several, or even many, marketing activities, and it is extremely difficult to simplify the equation.  I saw a presentation years ago from the CMO of a small software company that was very insightful.  They tracked all the touchpoints and influences of their prospects and customers, and at the end of the year, completed a data mining exercise to determine which combination of marketing activities yielded the best financial results.  They are probably still striving to calculate an ROI on each marketing activity, but in the meantime, I applaud their efforts to estimate their returns on a less granular basis.



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